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Low Loan Rate - How To Find A Low Loan Rate

low loan rates

Whether you are shopping for a car or a home, low loan rates are important. The interest rate on your loan may be just as important as the purchase price of your car or home. Just a modest reduction in your loan rate can mean a difference of hundreds of dollars a year in your monthly payment and thousands of dollars in interest over the life of the loan. A difference of just two percent on a $150,000 thirty-year mortgage, for example, would mean a difference of close to $200 in your monthly payment and almost $70,000 over the life of the loan.

So, what can you do to get the lowest loan rate possible?

• Check your credit history. Hands down the top factor in qualifying for a low loan rate is your credit score. You can’t totally change your credit score in just a short time if you’re planning on taking out a new loan, but checking it 60-90 days before you plan on applying for a loan gives you time to correct any mistakes and update incorrect information.
• Market conditions can be your friend. While both the automotive and housing industries have been struggling recently, you can use this to your advantage. With cars and homes moving slowly, car dealers, realtors and lenders are looking for ways to move their products. You may be able to use this leverage to negotiate a better purchase price and a better loan rate.
• Shop around. Impulse buying, whether for homes or cars, can often lead to a bad deal. Take your time, compare rates, and you’ll be more likely to end up with the deal you want.
• Join a credit union. Credit unions are non-profit; banks are not. This often means you can get a better loan rate through your credit union than you can from a bank.
• Put more money down. Not only will a larger down payment mean you’ll have a lower monthly payment and save interest over the life of the loan, lenders will also in most cases offer lower interest rates if you put more money down up front.

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